The Quick Read: It depends on what you still owe, because the 210-day wait decides when you may close, not how much cash you get. The new loan can reach 100% of the VA-appraised value, and the funding fee sits inside that cap. Your check is that new loan minus your payoff, any other liens, the funding fee if financed, and closing costs.
Here is the formula in one line: cash to you = new loan − old mortgage payoff − other liens paid − financed funding fee − closing costs. The rest of this article walks through each piece with modeled examples. Subject to lender guidelines and full file review, and not a commitment to lend.
VA cash-out estimate
Seeded with an example value, a typical balance, and a round cash request at the first-use fee; change any field.
Editable benchmark: 7.18% as of November 5, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a VA cash-out refinance quote.
Illustrative starting assumptions: a $350,000 home value, a $193,000 current balance, the full-value VA cap with the first-use funding fee financed, a thirty-year term at the current Freddie Mac benchmark, and property taxes and insurance estimated at typical national rates. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a VA cash-out refinance quote; a VA loan is priced by the lender at lock. The total loan, funding fee included, is capped at the program leverage on the reasonable value; the fee follows the tier chosen. The cash available is what the cap allows less the balances paid off and the fee, before closing costs, which are not included. The HELOC line is the line program’s combined loan-to-value ceiling applied to the same value and balance. Taxes and insurance are editable estimates. The debt-to-income figure is a guideline; residual income decides a VA file. Licensed in sixteen states for consumer mortgages.
What Does the 210-Day Seasoning Rule Actually Do?
Seasoning is a waiting period. It sets the earliest date you can close a new VA cash-out when the loan you are paying off is a VA loan. It does nothing to the dollar amount.
For a VA-to-VA refinance, you must clear two tests. The first is 210 days after the due date of your first payment. The second is the sixth payment. The later of the two controls. VA Circular 26-20-16, Exhibit A lays out the seasoning rules for each refinance type.
Why does the later date win? Because both conditions must be met, so whichever arrives last sets the earliest closing date. The first payment usually falls due a month or two after the loan closes, and the sixth payment comes five months after that. Counting 210 days from the first payment’s due date can therefore land on a different day than the sixth payment. A borrower who skipped or paid late can find the sixth payment is the date that holds things up.
| Borrower pattern | Which test usually controls |
|---|---|
| Paid on time every month | Whichever of the two dates falls later on your calendar |
| Missed or late payments | The sixth payment |
| Paid extra early | Neither test shortens |
That last row trips people up. Paying ahead does not shorten the clock. Both conditions still apply.
One more catch on the start date. Some pages measure from the day the first payment was made, others from the day it was due. Use “the later of 210 days and the sixth payment,” and ask your loan officer to confirm the exact start date for your file.
How Is the Cash Calculated Step by Step?
The new loan amount is capped by VA’s reasonable value rule. Reasonable value is the appraised value VA assigns to the home. On the wholesale VA programs Lendmire places files with, a cash-out can reach 100% of that value, including the financed funding fee. You can see how the loan fits together on Lendmire’s VA cash-out refinance program page.
There is no dollar ceiling on the cash. The limit is a percentage of value, so it works out differently for every household. Here is the order of operations:
1. Appraisal sets the cap. The new loan cannot exceed 100% of the appraised value.
2. The funding fee goes inside the cap. If you finance the fee, it uses part of that 100%. Any piece that would push you over must come from your pocket.
3. The payoff comes out first. Your old balance, plus per-diem interest and escrow adjustments at payoff, is paid from the new loan.
4. Other liens come out next. A second mortgage, a tax lien, or a debt you choose to pay off at closing is deducted.
5. Closing costs come out last. Appraisal, title, and lender charges reduce the check if they are financed or deducted.
6. What remains is your cash.
The practical takeaway: the cap is the ceiling, and everything else is a deduction beneath it.
What Do Worked Examples Look Like?
The three examples below use modeled assumptions, not market data. Every number is a percentage of the appraised value. Closing costs vary by file, so the table shows cash before other closing costs. Subtract your own costs from the last column.
The VA funding fee on a first-use cash-out is 2.15% of the loan. On later use it is 3.3%. The fee is waived for veterans receiving compensation for a service-connected disability and the other exempt groups. To keep the math simple, the examples assume a new loan equal to 100% of value, so the fee is applied to that full amount and the fee column reads as a share of value.
| Scenario | Payoff | Fee | Cash before other costs |
|---|---|---|---|
| A: first use, lower balance | 60% of value | 2.15% | About 37.85% of value |
| B: first use, higher balance | 80% of value | 2.15% | About 17.85% of value |
| C: repeat use, middle balance | 70% of value | 3.3% | About 26.7% of value |
Look at Scenario B. A borrower who owes 80% of value does not get 20% in cash. The fee and the closing costs both come out of that 20%. Equity is not the same thing as a check.
Using your entitlement a second time raises the fee tier. On a cash-out, that is 3.3% in place of 2.15%, which shaves more off the same equity. Exempt borrowers skip the fee, though appraisal, title, and lender charges still apply.
What Shrinks Your Check?
Five things take bites out of the cash. Most are visible in advance if you ask.
- The funding fee. It is financeable, but the fee counts inside the 100% cap, so it shrinks cash dollar for dollar.
- Closing costs. These are the appraisal, title work, and lender charges. The Loan Estimate and Closing Disclosure itemize them.
- Payoff extras. Interest accrued since your last payment, and any escrow balance adjustments, can raise the payoff figure above the balance on your statement.
- Other liens and debts. A second mortgage or lien must be cleared. Debts you choose to pay off at closing are deducted too.
- The appraisal. A low appraisal lowers the cap. Every dollar the appraisal misses comes straight off your cash, because the payoff stays the same.
Once the check arrives, how you spend it matters too. Paying off other debts with the cash converts them into debt secured by your home. A CFPB research paper on cash-out refinances notes that the cost of pulling out cash includes interest on the new amount plus fees. Weigh that before you spend the equity.
How Do Type I and Type II Cash-Outs Differ?
VA sorts refinances into two buckets, and the label changes which rules apply. In a Type I (a limited cash-out), the new loan does not exceed the payoff of the old one. In a Type II, the new loan exceeds the payoff, so money reaches you.
| Factor | Type I | Type II |
|---|---|---|
| New loan vs. payoff | At or below the payoff | Above the payoff |
| Cash to you | None | Yes |
| Net tangible benefit | Required | Required |
The net tangible benefit test applies to both types. The half-percent rate-reduction test and the fee-recoupment test belong to the streamline (IRRRL). They never apply to a VA cash-out, whether the loan is Type I or Type II.
What does apply is the net tangible benefit test. The loan must be in your financial interest, and it must meet at least one of eight benefits VA lists. VA Circular 26-19-05 confirms that this test covers all cash-out refinances. The Federal Register rulemaking behind these rules also folded equity preservation into the same test.
Do Lender Caps Lower the Federal Ceiling?
Sometimes. The 100% figure is what VA’s rules allow and what the wholesale programs Lendmire places files with reach. Lenders set a lower limit of their own. Some also tie the limit to credit score.
Those limits are called overlays. An overlay is a lender rule stricter than the program minimum. VA itself sets no minimum credit score. The wholesale programs Lendmire places VA loans with start at a 580 decision score. Residual income, the money left each month after major expenses, is the controlling test, and the 41% debt-to-income figure is a guideline, not a cap.
In practice, a borrower who hears “90% maximum” from one lender is hearing that lender’s overlay. It is not VA’s cap. That difference can be a large share of your cash, so it is worth comparing programs before you pick a lender.
Does Seasoning Apply When You Are Not Paying Off a VA Loan?
Generally not. The 210-day and sixth-payment test is aimed at VA-to-VA refinances. A conventional, FHA, or USDA loan being paid off into a VA cash-out is not usually held to it. You still need to pass the net tangible benefit test.
Two cautions apply. A lender may set its own waiting period on a non-VA payoff. And the VA Lenders Handbook is the place to confirm how seasoning is applied, so ask your loan officer to check it against your specific file.
This is why a conventional-loan owner with a strong equity position can sometimes refinance into VA sooner than a veteran who is cashing out of an existing VA loan.
Eligibility and the Steps Before the Check
VA says you must hold a Certificate of Eligibility, called a COE, and you must live in the home. You get the loan through a private bank, mortgage company, or credit union, not from VA directly. Details are on VA’s cash-out refinance page. Investment properties and second homes are not eligible for this loan.
Here is the path from application to cash:
1. Get your COE.
2. Confirm occupancy.
3. Have the lender classify the loan and check seasoning if you are paying off a VA loan.
4. Pass the net tangible benefit test.
5. Order the VA appraisal.
6. Complete full underwriting: credit, income, employment, and assets.
7. Sign, then wait out the cancellation window.
8. Receive the payoff, lien payments, and your cash.
The cancellation window deserves a closer look. On a refinance of your primary home, you have until midnight of the third business day to cancel. The CFPB explains the right to rescind: Saturdays count, Sundays and legal public holidays do not. Cancelling the new loan leaves your original loan in place. The cash is released after that window closes, so it does not arrive at signing.
Waiving the window is hard. It takes a bona fide personal financial emergency and a written statement from you.
What Happens to Your Monthly Budget?
Borrowing up to 100% of value means a larger balance. Financed fees and costs earn interest too. A cash-out also replaces your whole mortgage, so the term and rate reset with the new note.
On the plus side, VA loans carry no monthly mortgage insurance, which is a real difference from many conventional cash-out loans. The funding fee is the VA-specific cost, and it can be financed.
The tradeoff is thin equity. At 100% of value, a price decline can leave you owing more than the home is worth. Residual income is the test that tells the lender whether the new payment fits your budget, so run your own household numbers before you take every dollar the cap allows. Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Some states also limit cash-out by law, so a state rule can shrink the amount even when VA’s rules allow more.
If a prior refinance is part of your history, Lendmire’s guide VA Cash-Out Waiting Period Rules After a Prior Refinance covers that wrinkle.
Key Terms Defined
Seasoning: the waiting period between your first payment and a new VA-to-VA refinance.
Reasonable value: the value VA assigns after the appraisal, which sets the 100% cap.
Funding fee: the one-time VA charge, from 1.25% to 3.3% depending on use and down payment, that can be financed and is waived for exempt borrowers.
Net tangible benefit: the test showing the loan is in your financial interest, met by at least one of VA’s eight listed benefits.
Certificate of Eligibility (COE): the VA document that confirms you are eligible for the benefit.
Residual income: what is left of your monthly income after major obligations, and the controlling underwriting test for VA loans.
Type I and Type II: VA’s labels for limited cash-out (no cash to you) and true cash-out (new loan above payoff).
Pre-Application Checklist
- Pull your latest mortgage statement and note the payoff, including accrued interest.
- Confirm whether the loan being paid off is VA, and the date your first payment was due.
- Get your COE.
- List any second mortgages or liens.
- Decide how much cash you actually need, not just how much the cap allows.
- Ask whether you are funding-fee exempt.
- Ask every lender what overlays they apply.
Frequently Asked Questions
Can I get 100% of my home’s equity as cash?
No. The new loan can reach 100% of the appraised value, but the payoff, other liens, the funding fee, and closing costs come out first. What remains is your cash, and that is always less than raw equity.
Do six payments satisfy the seasoning rule?
No. Six payments are only one part of the rule, and the 210-day test must also be met. The later of the two dates controls. Paying early does not shorten either one.
Does the 210-day wait apply if I am refinancing a conventional loan?
Generally not. The test targets VA-to-VA refinances. A lender may still set its own waiting period, and the net tangible benefit test still applies, so confirm both with your loan officer.
Can I roll the funding fee on top of the 100% cap?
No. The financed fee counts inside the cap. Any part that would push the loan above 100% of value must be paid in cash at closing.
What if the appraisal comes in low?
The cap drops with it. Your payoff does not change, so the shortfall comes straight out of your cash. A low appraisal can reduce the check a lot, or leave you with no cash at all.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Lendmire arranges FHA, VA, conventional and jumbo purchase and refinance loans through wholesale lenders; every file is underwritten by the lender under the applicable program guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Sources and Next Step
If you are weighing a cash-out refinance against keeping the loan you have, Lendmire can help you compare the programs and the equity each one reaches.
For your own numbers, request a scenario review with Lendmire.
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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. VA Circular 26-20-16, Exhibit A
2. CFPB research paper on cash-out refinances
4. Federal Register: Revisions to VA-Guaranteed or Insured Cash-Out Home Refinance Loans
5. VA
6. VA.gov: Cash-out refinance loan
7. CFPB: How Long Do I Have to Rescind When Does the Right of Rescission Start
This article is part of Lendmire’s VA cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: VA Cash-Out Refinance vs Conventional Cash-Out When the Cash Is Not Taxable Income · How to Qualify and Apply for a VA Cash-Out Refinance Before the Appraisal · How to Plan and Use a VA Cash-Out Refinance to Go Fixed
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.